What is Cyber Crime Insurance?
Cyber-insurance is an insurance product specifically designed to protect businesses and individuals from online risks, and more from threats and risks relating to information technology infrastructure and activities. Typically, cyber risks are either excluded from traditional commercial general liability policies or not properly mentioned in the policy covers.
Several white-collar financial and data-driven crimes occur through the digital medium and hence require a special type of insurance cover that addresses the needs of these type of risks. Cyber Crime insurance covers the losses relating to damage or loss of information from software, hardware, web/mobile applications, IT systems and networks. This policy covers assistance with and management of the incident itself, which can be essential when faced with reputation damage or regulatory enforcement.
Cyber-liability insurance is also commonly known as data/security breach, network security or privacy insurance include coverage for claims related to third party unauthorized disclosure of nonpublic personal information or identity theft. There are few insurance companies provides such cyber-liability insurances to cover fees and expenses required to comply with an IT laws such as notification, monitoring, computer forensics, lawyers/experts to negotiate with regulators after a privacy breach event and remediation of the deficiencies that gave rise to the privacy breach event.
A Cyber Crime Insurance policy helps to protect against damage to computer systems and data from computer viruses, hacking and criminal activity. It covers a type of both liability and property losses that may result when a business engages in various electronic activities, such as selling on the Internet or collecting data.
How does Cyber Crime Insurance Protection work?
It is not always that a security breach caused due to hacking or cracking into a system, sometimes, its due to sheer negligence such as a lost or stolen laptop, smartphone or memory stick, or an unsecured IT network. Such negligence may lead to severe financial and reputational loss. In short, most of the intangible property may be covered by this special type of insurance policy.
Why Cybercrime Insurance Policy for Business?
Data breaches can be expensive for a business and sometimes can be a single deciding factor to survive in the market. Cyber liability insurance can assist protect the business from cybercrime and data breaches. Cyber insurance can assist protect the company in the event of a data breach or cyber threat.
What risks are covered under the Cyber Crime Insurance Policy?
Cyber risks fall into the first party and third party risks. Insurance products exist to cover either or both of types of risk. First-party insurance covers business’s assets. This may include:
- E-Theft Loss as a consequence of having transferred funds or property or given any value due to the fraudulent input of data into a computer system or through a network into a computer system
- Damage or Business interruption from network downtime
- E-communication Loss occurring due to a customer having transferred funds or property or given any value on the faith of any fraudulent communication for which loss you are held legally liable
- E-Threat Loss, including the cost of a professional negotiator and any payment made or any fund or property surrender intended as an extortion payment
- E-Vandalism Loss, even when caused by an employee
- Customer notification expenses when a legal or regulatory requirement to inform them of a security or privacy breach
- Reputation damage which arising from a breach of data that results in loss of intellectual and critical property or customers
- Crisis Expenses, including the cost of public relations consultants.
- Theft of money or digital assets through theft of equipment or electronic theft
Third-party insurance covers the assets of others, typically customers. This may include:
- Security and privacy breaches, and the investigation, defence costs and civil damages associated with them
- Content Liability, including claims for intellectual property, trademark and copyright infringement
- Disclosure Liability, including customer claims due to system security failures resulting in unauthorized access to or dissemination of private information on the Internet
- Reputational Liability, including claims alleging disparagement of products or services, libel, slander, defamation and invasion of privacy
- Conduit Liability, including claims arising from system security failures that result in harm to third-party systems
- Impaired Access Liability, including claims due to system security failure resulting in systems being unavailable to customers
- Multi-media liability, to cover investigation, defence costs and civil damages arising from defamation, breach of privacy or negligence in publication in electronic or print media
- Any Loss of third-party data, such as payment of compensation to customers for denial of access, and failure of any software or systems
Financially protect company from cyber attacks
Cyber crimes and attacks have increased in India by 350% over the past three yrs. 11,592 cases of cyber attacks were registered in 2015. Karnataka stands 3rd in the maximum number of cyber attacks.
Cybercrime insurance can protect you from the following:
- Get covered for any financial loss due to loss of confidential data
- Any cases of payment gateway flaws
- Financial loss to the business due to network downtime
- Get covered for even for lawsuits
- Theft of equipment
- Payment of compensation to customers for failure of any software or systems
Do YOU need cyber crime insurance?
It depends on the nature and type of business you are into. If you are an e-commerce company and dealing with online transactions, buying/selling of goods or services, etc., then it is advisable to speak to an insurance agent who is specifically dealing with cyber insurance policies and assess how it would safeguard your business interest.
Learn more regarding cyber insurance and bring shielded today.